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Democracy… Universal Suffrage…

It has been more than one year since I last posted on this blog, and as such I dare not expect anyone to notice this new post for quite some time. For the better part of the past year, I have been working an over-full-time job and had very little time to contribute to writing blog posts that half a dozen people read, most of whom I know only read it to “give me face”; for this, I am extremely grateful!

Fortuitously, I have been admitted to a master’s degree programme and have since decided to abandon work (and money) to embrace… work (with no money)! Hence, it would be wise for me to at least attempt to write some form of mini-essay (of some intellectual value, I hope) to exercise my rusty fingers and my even rustier brain! So allow me to begin by discussing some issues I have with Hong Kong’s political scene – this ought to be an excellent warm-up exercise to ease me back into academia.

Firstly, as regards democracy, those who know me well understand that I do not take a liking to the democratic process. Unfortunately, the current political scene in Hong Kong is worse than that. Whilst there is no clear-cut definition of democracy, it is quite clear that the political structure in Hong Kong has little semblance to any form of democracy. I am only concerned with one issue: accountability. Forget the unfair and biased ways which our officials are elected; for me, accountability is perhaps the bottom line for a democracy. The evidence is there for all who has eyes to see: our top officials are not popular at all. But where are the changes? Where are the resignations?

But everything will be better if we have real democracy, right? Wishful thinking, for one simple reason: I’m not so sure whether the general population of Hong Kong is educated, interested or at least familiar enough with politics in order to have a justified (not necessarily correct per se) stance. Furthermore, such people can be easily be manipulated for monetary benefits or otherwise. Let’s not forget the protestors that were given money and free lunch to take a stroll around Causeway Bay. It’s quite easy to cheat for votes, really.

Furthermore, I believe that there is a mentality common among Hong Kongers that really does not work well with democracy: rationality. To me, Hong Kongers are as close to to the perfectly rational agents in free-market economic theories. It’s therefore no coincidence that the free market is thriving in Hong Kong! Unfortunately, this also means that people have very narrow vision and very rarely care for anyone beyond their cliques. This alone is not devastating if all parties’ interests are represented fairly. Yet we find that those who need the most support from governments usually have the least power to obtain it, such as ethnic minorities. But it is possibly too much to ask of people to sacrifice their own personal gain to help others.

Nevertheless, let me be clear: in my opinion, having a democracy would probably be better than the current situation… which brings me to the next point regarding universal suffrage.

So what if we have universal suffrage? It is obvious that the CCP wil never give Hong Kong a “genuine choice” (a term used by pan-democrats), and I grudgingly accept that. I understand that some people may argue that, if we had a “partial” democracy, we could at least have chosen Albert Ho or Henry Tang over Chun-ying Leung. This is naive – had we had universal suffrage in 2012, I am quite confident that Albert Ho, at least, would not be in the running for the Chief Executive position.

What I cannot tolerate is the pretence of having a democracy, which is really the only difference between having and not having universal suffrage. It sends incorrect signals to people, and allows the CCP to put the blame on Hong Kong people for choosing an incompetent Chief Executive (more groundless accusations have been made).

Unfortunately, this is all my rusty brain can contrive of at the moment. I submit that I have made rather brash statements and that many of the points I raised need further refinement, and I would gladly welcome any comments and suggestions to stimulate discussion and oil the cogs in my brain!

Wealth Gap and Social Disharmony

The following is my quick response to a question on the HKDSE Liberal Studies paper.

To what extent has the serious wealth gap adversely affected the social harmony of Hong Kong?

The wealth gap is not necessarily relevant to social harmony. Firstly there needs to be a distinction between poverty and income inequality, as much of the alleged social disharmony is perhaps affected by the former, rather than the latter. Secondly, many other factors affect social harmony, and these factors combined may be more significant than the wealth gap alone. Therefore, I believe that the wealth gap only affects Hong Kong’s social harmony only to a small extent.

From numerous news reports and surveys, it is clear that the primary concern of Hong Kong citizens is to be able to make ends meet. For example, many are complaining about the house prices and the sky-high inflation of Hong Kong in recent years. However, can these problems be blamed on the wealth gap? The answer is no. These problems persist because people are poor, not because people are less wealthy than their next-door neighbours. Therefore, the wealth gap itself should not be considered as the source of social disharmony, but poverty is. Unfortunately, many have mixed the two concepts and assumed that one implies the other.

Secondly, there are other factors which more adversely affects social harmony. For example, the “unfair” political system of Hong Kong is a major factor of social disharmony. If one observes the annual 1st July protests, it is clear that Hong Kong people’s primary complaint is the lack of universal suffrage, poor performance of top government officials and fears that the Chinese central government is attempting to restrict the freedom of Hong Kong people.

Another example: much of the social disharmony stems from tensions between the local Hong Kong people and foreigners and Mainland Chinese. Some Hong Kong people have shown intolerance to newcomers to Hong Kong, whilst some newcomers do not have respect for the local customs and culture. Moreover, Hong Kong is overcrowded and the increasing inflow of people puts pressure on the limited resources in Hong Kong, thus creating social pressures.

In light of all these other factors, the wealth gap does not seem to be as significant. In conclusion, it is my belief that the wealth gap’s influence on social harmony is, firstly, not even directly relevant and, secondly, not as great as those of other factors.

To Drink or Not to Drink

So Lai Tung Kwok, a Hong Kong government official, suggests that women should drink less to avoid being raped. Article here). And so my first reaction to this news is… well okay good advice.

But as I read the complaints and outbursts by female rights groups, I feel a bit miffed, actually. I think they have interpreted the advice as “drunk women deserve to be raped” which, to be honest, was not what he said, though some may argue that it is what he implied.

But I think people need to face facts here – the statistics are clear, and is probably only “the tip of the iceberg” (article here). So what is wrong with Lai’s motive of trying to get rid the problem by asking women to take preventative measures? Inherently, I do not think there are any problems. The problem with what he said stems from his delivery of the advice and extrapolation, which will be discussed below.

I mean, I have never been a great fan of alcohol, but I don’t mind peers drinking responsibly (as long as I don’t have to send them home afterwards)! But yes, women (and men) have the right to drink to their hearts’ content (according to the law) and they have the right not to be raped… but isn’t that a bit of a wishful thinking?

It’s like exposing the wealth contained in your wallets and expecting for it not to be stolen. It’s like crossing roads (without traffic lights or zebra crossing) without looking both sides and expecting cars not to hit you because pedestrians have the right of way. Yes, true – both are expected of the Hong Kong community. But to think that people should not make preventative measures and reduce risk is… far-fetched to say the least. Yes, even if the thief is caught, the rogue driver is trialled and the rapist is punished… how much better off will the victim be?

Then we shift the blame to the police and the government because they are responsible for protecting women. May I ask how is it feasible that will be? Many of the rapists are friends or people whom the women were socialising with at the bars/clubs/pubs etc. Is the police responsible for following each drunk woman and making sure that the guy who sends the the woman home is not trying to rape her? If so, fine. But that sure reminds me of that Basic Law no. 23 which most Hong Kong people don’t want. Then we will be complaining how much power the police have and make things even worse…

And also, being drunk may pose problems when trying to prosecute the victim. I’m not familiar with law nor the court proceedings, but to me it sounds as though it will be more difficult to prove that the woman did not give consent, reducing the chance of the perpetrator to be caught.

However, I am a bit worried about Lai’s suggestion on one point: it might make rape victims feel guilty or responsible for their mishaps, and that might be detrimental to their mental health. Therefore, yes, Lai lacked sensitivity and should be more careful given his position.

I would like to end by reaffirming my stance: I do NOT believe that women who are drunk deserve to be raped and should be (at least partially) blamed for the rape. But as regards responsibility, we are all responsible for our own personal safety to some extent, right? When we aim to solve problems, we cannot act expecting the IDEAL situation to happen (because ideally, rape should not happen at all in the first place). The facts, figures and evidence are established and we should act according to those.

Some Thoughts on the Expectancy Theory of Motivation and Assessment

According to Edwards (1954) and Atkinson (1964), motivation (M) depends on the perceived probability of success (Ps) and the incentive value of success (Is), and these two terms multiplied together will give a value for motivation.

So the first issue would be how to define “success”. Do students wish to learn, and thus fulfil growth needs (recall Maslow’s hierarchy of needs)? After all, some would argue that we are innately disposed to build up competency. Or do students wish to only obtain a high grade, in order to utilise their good grades as a means to some other end (e.g. finding a career). Why not both?

The definition of success matters immensely because it will affect both the incentive value and the probability of success. For example, those who are extrinsically motivated (therefore success depends on the grades and student is focussed on performance goals) may perceive norm-referenced assessment to be detrimental to success, because there will always be losers.

However, the same situation can also be interpreted in the opposite way: perhaps norm-referenced assessment may give some students hope because they will still be able to get that high grade (which they might not have done had the teacher used criterion-referencing). After all, when chased by a bear, one simply needs to outrun a friend to avoid danger!

The incentive value also depends on the goals. A student interested in learning goals will find little value in the grade s/he receives, as s/he will only be looking for constructive feedback in order to improve his/her competency. As such, success very much depends on the quality of feedback from the assessment, and so the student will value essay or project-based assessment methods, as opposed to simple MCQ and fill-in-the-blanks types of assessments.

Lam, Pak and Ma (2007) and Watkins (2009), however, believe that it may be difficult to use motivational theories developed in the West and apply to the circumstances in the East. Lam et al. (2007) explains that the Chinese collectivist culture, sparsely observed in the West, may also influence motivation.

And so combining everything, it is immensely difficult for the expectancy theory of motivation to come to any solid conclusions regarding how exactly to make assessment motivating to students. Nevertheless, it serves as an excellent blueprint and foundation for thinking about this issue.

Atkinson, J. W. (1964). An introduction to motivation. Princeton, NJ: Van Nostrand.

Edwards, W. (1954). The theory of decision making. Psychology Bulletin, 61, 380-417.

Lam, S. F., Pak, T. S., & Ma, W. Y. K. (2007). Motivating Instructional Contexts. In P. R. Zelick (Ed.), Issues in the Psychology of Motivation (pp. 119-136). Huppauge, NJ: Nova Science.

Watkins, D. A. (2009). Motivation and competition in Hong Kong secondary schools: The students’ perspective. In C. K. K. Chan & N. Rao (Eds.), Revisiting the Chinese learner: Changing contexts, changing education (pp. 71-88). Hong Kong: Comparative Education Research Centre.

Who Are the Owners of What?

Margaret Thatcher’s death has made the headlines of the world’s newspapers. For better or worse, she was one of the towering political figures of the post-WWII times. As a result of her death, people have been digging up and discussing her political history. Some hail her for Britain’s prosperity, brought by her free-market principles. Others curse her as one of the cruellest politicians the world has ever witnessed for her lack of regard for the proletariat.

Being in Hong Kong, however, I do not wish to discuss UK’s political history and meddle with things I know little of. What interests me more are actually her actions which have led to the reunification of Hong Kong and the PRC. However, instead of discussing the political issues surrounding Hong Kong’s handover, I just have one (not-so-)simple question: does Hong Kong belong to anyone? Is Hong Kong something that can be bartered and traded between parties?

It’s all very well to say that Hong Kong belongs to the people in Hong Kong, but looking at the current political scene of Hong Kong, it feels as though Hong Kong belongs to the state, which calls itself ‘the Government of the Hong Kong Special Administrative Region’. Furthermore, this government is controlled by another government, so Hong Kong genuinely belongs to the PRC now.

I’m not advocating democracy in particular. I mean, the USA has some form of “democracy” but it seems to be owned by a few rich people anyway, with the US government doing their bidding. But it’s all very interesting to think about how ownership is determined.

One could argue that pre-WWII, people literally fought for ownership. Imperialism, it was called. But of course, these days, we do our best to avoid conflict. Well, physical conflict, at least. We still thoroughly enjoy fighting and competing for resources, but I guess the weapons we use these days are politics and economics.

So did Thatcher have ownership of Hong Kong before the handover? Was she right to give China what had been theirs before the British seized it? I mean, I’ve read articles about how certain groups think that Thatcher should have stood her ground and kept Hong Kong under British rule, or at least give Hong Kongers the right to abode in the UK. And in some sense, perhaps it is true. The British had come and conquered, and claimed Hong Kong to be theirs. So maybe they should have acted in the best interest of Hong Kong. Thatcher would vehemently fight to keep the Falkland Islands under British rule, yet did not treat Hong Kong the same way. But if one agrees that Imperialism is bullying and stealing, then shouldn’t it be right to return what was original not theirs to keep?

In my confusion, I turn to economics for help. Property rights is a very well-known assumption which underlies the success of the free-market system – after all, people can only trade what belongs to them, and what they produce is theirs to keep, and can be used to trade for other objects of need/desire. But economics cannot tell me who specifically to give property rights to. For example, Coase’s Theorem, the most famous economics theorem on property rights, only states that as long as property rights are given to somebody, then with free negotiation, the best economic outcome can be achieved.

But maybe that’s also the implication of the theory. Take Hong Kong apart, and dole out small portions to everyone, and let the people of Hong Kong own Hong Kong, with the people making decisions for themselves. Huh, if only reality was that simple…

Budget Burdens

As many of you may know, the Financial Secretary of Hong Kong John Tsang (him again… I thought he’d be gone by now) released the latest government budget last week, and I believe it can be summed up in four words: more of the same. When it comes to lacking creativity, the Hong Kong government tops the list. But I feel that, you know, it’s all right as long as the old tricks work, right? Problem is, people have been criticising the old tricks for as long as they have been used (I know that even I made similar criticisms last year).

I’m going to keep this brief because I have to go play badminton later: there are two main issues which bother me. I believe that different people generally have different views regarding the policies and many things can be discussed/argued (I prefer not to use the word “debate” these days). However, these two issues are ones which, I think, hinder the development of Hong Kong:

Firstly, I feel that the government does not really ask themselves whether their pressure-easing, poverty-alleviating, “bonbon-giving” measures actually have any effect. I think many people, myself included, struggle to see the effects of the Community Care Fund, for example. And that goes for the investments in infrastructure and finance.

Second of all, I’m quite annoyed at how rich the government is, but not in the way most people are. People have been talking about widening the tax base of the government in anticipation of the baby boomers retiring, but why is there this determination for ensuring that the government has enough to spend in the long-term? I personally would like to see the government collect less and spend less – spend only on those who need it. I think that the outlook needs to be different – the Hong Kong government should look to make Hong Kong “self-sustainable”, like what the environmentalists want.

The Power of Economics (Part II of II)

Last time I’ve mentioned two very powerful assumptions which underlie economics. Today, I would like to show where economics stops being as powerful (or when using economics becomes controversial).

In any basic economics course, students would no doubt have learned about the handy “willingness to pay” tool to analyse decision-making. Reduce everything down to a number (i.e. price) and we can quantitatively see which decision is worth more! How delightfully useful! Simple cost-benefit analysis.

So this is the issue: what if we can’t reduce everything down to numbers? This applies very strongly to cases where moral and ethics are major concerns, such as abortions and euthanasia. Yes – what is the price of life? I do not believe that we can simply put price tags on an unborn foetus or on a dying person, and then compare that with the cost of all the suffering the “victim” has to go through. But probably what shocks me most is the fact that there are people who have no regard for such moral and ethics, and that they DO make decisions this way.

In reality, institutions do make some estimate of how much a human life is worth. If we think that human life must be safe beyond all costs, then we would make people drive at 10 km/h and put fluffy pillows between the road and the pavement, right? So what we do is essentially sacrifice safety for efficiency. So does that mean that we should allow people to die, because human life is not worth the cost of the extra precautions (e.g. reduced inconvenience and efficiency)? So when do we use economics to analyse the costs and benefits of human life, and when do we have to stand firm and defend moral and ethical principles (of course, everyone has their own standards, and I’ll not plunge into these issues today).

The second issue which economics do not seem so good at answering is the question of altruism and selflessness. This is obvious, because the basic underlying assumption of economics is that people are inherently rational and self-interested, so given this large assumption, altruism and selflessness cannot exist in economics.

But what a shame! Economics is so good at explaining so many human phenomena – maybe we should at least scratch the surface of this philosophical issue. In general, people get utility (i.e. satisfaction) from consuming goods/services. However, in the case of altruism, we feel good when we give away goods/services. Giving away goods/services are costs, and costs should make us feel bad. Yet, here costs make us feel good. So we have arrived at a tautological loop – whether we consume or we give away goods/services, we feel good. This makes sense, but it doesn’t achieve very much. Another way to think about this would be to say that we are putting a utility function into a utility function – that is to say “I enjoy doing this because I enjoy doing this” – a logically sound and valid statement, but that’s like saying that your mother is a woman.

That is probably why people feel conflicted when Adam Smith claims that people are self-interested in The Wealth of Nations, yet he claims that people are altruistic in his other book The Theory of Moral Sentiments. But hey, why not both?

The Power of Economics (Part I of II)

I find economics highly intuitive, and a deceptively simple but powerful tool to analyse human behaviours. These days, many people claim to know at least something about economics, but I personally believe that studying economics is interesting not because of what conclusions economic theories can arrive at, but the fact that these theories apply in so many situations to so many people.

I sometimes am amazed by how far-reaching the discipline of economics has become. Arguably conceived in Europe by David Hume, Adam Smith and the Physiocrats in the 18th century, economics as we recognise it today has spread to all corners of the world; it has become the foundation of many social science theories in many countries. Yet, we think of people as diverse and unique, which begs the question: why can one discipline be so effective in analysing and explaining (almost) everything?

This observation becomes even more bewildering when we consider that the thought process of the economist is inherently scientific, at least to some extent. I am, of course, referring to the (in)famous Latin phrase ceteris paribus, commonly featured in any standard economics textbook, which is to hold all other factors constant. In fact, a large portion of econometric analyses focus on “controlling for” factors which are deemed to be irrelevant to the hypothesis in question.

This thought process sits well with natural sciences, because in natural science, there is a grand underlying faith in the fact that there is an order in nature, whereby scientists expect nature to adhere to rules. However, as I have argued in my previous blog post, it is possible for economists to mimic the scientific method to some extent. Fundamentally, this means that humans must at least share some common attributes irrespective of race, gender and culture, and below are two things which I personally think fundamentally appeal to the human nature:

1. Egocentrism: economists simply enjoy assuming that people are there for only themselves, which is true in many cases. Whilst I do not want to say that people inherently gorge resources down their throats to satisfy their bottomless pits (of desire), we do! Humans are motivated by greed, selfishness and laziness. When we get the opportunity, we will voraciously leap upon it… and I thoroughly enjoy how economics has captured this side of human nature.

2. Rationality: another gem of economics – the (in)famous cost-benefit analysis. This speaks for itself, of course. Very few people would pay more for less, and the whole of microeconomics is dedicated to measuring how firms’ and individuals’ costs and benefits weigh against each other.

In fact, when Adam Smith wrote The Wealth of Nations, he did not set up a scientific framework to analyse the economy. Rather, he was a keen observer – noting down the things that he had seen and logically working out people’s decisions had led to the wealth of nations. People had been thinking economically way before. Smith was merely the first to have written about it.

And so, I believe that, in the great scheme of things, a clear understanding of the roots of human nature is at least as important as understanding the complicated economic models and theories we have today.

In the next section of this series, I talk about the exact opposite – when economics doesn’t work so well…

Rates, Rates, Rates

Hello there! Sorry for the 5-month hiatus, but now I’m back! And I think I will start off with a just short post just to warm myself up.

It’s getting close to that point in my life when I start having my post-university-graduation crisis – i.e. thinking about my future career. Being the forward-thinker I am, I’ve been considering three rates which will be highly relevant to my future livelihood: hourly wage rates, tax rates and interest rates. Today I think I’ll just talk about interest rates.

I’ve been chatting with a couple of friends about buying my own property, hopefully in the not-too-distant future. As most may know, the property prices in Hong Kong are absolutely crazy. We’re talking about old, poorly-located properties costing around $10000 per square foot, with room to increase. But for me, something else is more interesting – something astonishingly cheap. In this distorted economy we live in today, there actually IS something which is actually CHEAP – the cost of borrowing (i.e. low interest rates).

I’ve always been taught that interest rates is positively correlated to the risk born by the borrower. And really, the world economy is getting riskier by the day. We hear about the US re-electing Obama (yes, Obama is a high-risk prospect), countries printing more money, the UK having to increase borrowing because the economy did not grow as much as expected, asset bubbles getting bigger by the day, income inequality in Hong Kong worsening, Leung Chun-ying prowling around ready to make the property market plummet… and with all this happening, the interest rate for mortgages is not even 3%?!

I guess in terms of asymmetric information, it’s not much of a problem… right? I mean, certainly those who could even afford to borrow and buy property these days should be able to repay their debts, right? But somehow the low interest rate doesn’t sit right with me. Me being very conservative and traditional, I feel that encouraging borrowing (and therefore, spending) seems to be very unhealthy for the economy. I feel as though everyone is beginning to take for granted that money is easily and readily accessible and spending beyond their means. We see this with many governments, and having a low interest rate does very little to deter people from borrowing more.

Plus, what do the banks earn if they receive such low interest rates? It all doesn’t seem unsustainable to me, and sooner or later, the banks will increase their interest rates to adjust for their short term revenue cuts. This means that, for those who had borrowed when the rate was around 1.5%-2%, their interest payments may DOUBLE… Will we witness a mass default, much like the US did 4 years ago?! But with everything so artificial these days, we don’t feel that the economy is unnaturally good, and I think the low interest rate serves as a reminder that the economy is not as robust as we may be tricked to think…